The Global Connection |
July 2010 |
CRC-Evans Provides Pipeline Equipment and
Expertise Across the World
By Bradley Kramer
Building a cross-country pipeline requires a wide range of personnel, equipment and expertise in order for the project to be a success. From stringing the pipe along the right-of-way, to fusing joints and securing the line underground, CRC-Evans Pipeline International provides the necessary equipment and services to build the pipelines that supply oil and gas to customers in both hemispheres of the planet.
CRC-Evans is a global provider of pipeline construction equipment and automatic welding systems, as well as subsea pipeline managed services, field joint coating and inspection. The company has customers in Europe, Asia, South America and the Middle East, in addition to North America.
Two major divisions of CRC-Evans are Pipeline Equipment and Automatic Welding, which are managed under the company’s Pipeline and Automatic Welding Group.
The group is responsible for CRC-Evans’ pipeline construction equipment business and is headed by Brian Laing, president and chief operating officer of the Pipeline and Automatic Welding Group.
“Pipeline construction is attractive to us,” Laing says. “With the construction sequence of pipelines, the cost is quite high. The speedier you can fabricate a pipeline, the more you lower your overall cost. We use our tools and know-how to make construction more efficient. Productivity and quality are very important in this business.”
CRC-Evans was founded in 1933, and its corporate headquarters are in Houston. The company also has offices and facilities throughout North America, in Tulsa, Okla., Toms River, N.J., and Edmonton, Alberta, and across the globe in the United Kingdom, The Netherlands, the Middle East, France and Africa.
The Pipeline Equipment Division is based in Tulsa, with Fred Lysak, president of the division, leading operations. Lysak has been with CRC-Evans for 10 years, after he spent 17 years working for a company that made buoyancy control materials for the oil and gas business.
“My father was in the industry,” Lysak says. “I sort of grew up in it and started working part time before I finished school. From there, I moved into the field and carried on with it.”
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The Automatic Welding Division is based in Houston, where Paul DeWeese, who has been with CRC-Evans for 14 months, is president of the division.
“In pipeline construction, the bottleneck is welding,” DeWeese says. “We spend our lives trying to make our equipment faster and more efficient.”
Both Lysak and DeWeese report to Laing, based in Houston. Laing is also responsible for CRC-Evans’ offshore pipeline operations.
Two elements are very important for success in the pipeline construction market, Laing says. One is technology, which supplies the capability to build pipelines. That’s the equipment CRC-Evans manufactures. The second important thing is having the right delivery vehicle for the product. That’s the service behind the equipment.
“Having a problem is not the problem,” Laing says. “Having the ability to solve problems and stay productive is what’s important. If a customer has a problem, we can dispatch a technician or replacement parts to the location and minimize downtime. It’s the key to success for our company.”
Equipping Pipeliners
The Pipeline Equipment Division is the oldest division of CRC-Evans. Although its main office and manufacturing
facilities are in Tulsa, the division has additional offices in Texas, New Jersey, Alberta, France. Holland and Dubai.
The division specializes in rental and sales of pipeline construction equipment, including lineup clamps, mandrels, pipe bending machines, buoyancy control supplies, padding equipment, welding torches, pipe beveling equipment and conveyor systems for applying pipe coating for onshore and offshore environments.
When CRC-Evans sells or rents equipment, the company typically sends technicians to the project’s kickoff to ensure that the customers know how the machinery operates.
If the equipment goes down, CRC-Evans also supplies technicians to service it in the field.
“We back up our equipment with support,” Lysak says. “We have technicians that can meet customer needs within 48 hours. We’re a leader in the industry. With the development of new products coming on board, we feel we can maintain that lead.”
Developing new equipment helps CRC-Evans continue to meet its customers’ needs, most of whom are pipeline contractors, which account for 85 percent of the company’s clientele. The other 15 percent are primarily pipe mill owners and laybarge owners who purchase equipment for onshore and offshore pipeline work.
The Pipeline Equipment Division recently redesigned its pipe bending equipment to be a fully automated system, called the AutoBender. The pipeline details are programmed into the system and the machine then bends the pipe to the correct specifications.
The division has also developed a new line of self-propelled lineup clamps and an automated mandrel that is self-centering and positions itself to the proper location before each bend. CRC-Evans is also the exclusive distributor of the Laurini padding machines. (Laurini is based in Italy.) CRC-Evans is in the process of developing a portable, onsite concrete coating plant.
The Pipeline Equipment Division employs 65 non-manufacturing staff and is backed by 130 manufacturing personnel, who manufacture products for both Pipeline Equipment and Automatic Welding. The division’s revenues fluctuate, but it is usually the second highest earning sector for
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CRC-Evans, behind the Automatic Welding Division.
Lysak says 2010 is looking like a fairly strong year, with the division earning about the same as last year. “It’s not as good as 2008,” he says, “but we’re far ahead of 2004-2005.”
The domestic United States accounts for the majority of the business for the Pipeline Equipment Division, with a 60/40 split toward rental compared to sales.
“Good relationships are important in the pipeline business,” Lysak says. “Pipelines are built like an assembly line. That’s why it’s so important to have reliable equipment and good service to get equipment up and running if something goes down.”
Joining Pipe
CRC-Evans’ Automatic Welding Division is based in Houston and employs about 200 people on the operations side and about 50 to 75 in its manufacturing facilities, which are based in Tulsa. The division also has what DeWeese calls “a variable supplemental workforce” of 50 to 100 employees made up of welders and deckhands for offshore applications.
Automatic Welding has been around for more than 40 years and has become the largest division of CRC-Evans, DeWeese says. International clients account for 60 percent of the division’s business.
“2008 was a banner year [for the division],” says DeWeese, who referred to pipeline construction as a “lumpy” business. “2009 followed the down trend in the industry. 2010 is up 20 percent from 2009. We don’t see this year being as robust as 2007 or 2008, but it’s definitely better than 2009.”
There are three primary aspects that DeWeese says are the “meat and potatoes” of the Automatic Welding Division:
1. Rental equipment — this is the biggest aspect of the division’s business. “Our crown jewels are our internal and external welding machines,” DeWeese says. “We call them ‘bugs’ in the industry. It’s mechanical, fast and repeatable.” The machines are primarily rented to contractors for a period of three to four weeks up to a year, depending on the pipeline project’s length. Rentals are supplemented with service technicians, who maintain the equipment and are available in the case of a piece of equipment failing in the field.
2. Equipment sales — China and Russia are the division’s primary customers at present. Sales are more popular in locations where renting the equipment is more difficult logistically. In some cases, CRC-Evans will provide training for the equipment sold.
3. Services — the Offshore Division manages the welding, joint coating and inspection work on laybarges because some offshore contractors don’t have the personnel to handle and weld pipe. “They’re experts at operating vessels,” DeWeese says. “It’s their job to put the pipe off the back of the boat. They come to CRC to provide the welding that’s done on the boat. Because of the nature of onshore pipeline construction, the contractors tend to have access to their own welding personnel.”
DeWeese also divides the equipment that the Automatic Welding Division provides into three categories:
1. Support — pipe facing machines add a narrow gap bevel to the pipe for a consistent weld around the joint. Support equipment is considered a the tools needed before the weld.
2. Internal pneumatic welding machines run inside the pipe, controlled by remote frequency control. The machine aligns the joint with lineup clamps and welds the root bead (first pass). It can do a root pass on a 48-in. pipe in 1.2 minutes and then propel itself 40 ft to the next joint in less than 45 seconds.
3. External welding machines, called “bugs,” do the fill passes, completing the weld started with the root bead and finishes with a final cap pass.
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In Canada, where the terrain is mostly flat, CRC-Evans’ automatic welding equipment can complete 20 to 25 joints per hour. In a shift, a crew can weld 100 to 160 joints per 6,400 ft (about 1.25 miles). According to DeWeese, the company’s equipment performed 290,000 pipeline welds last year, more than 2,500 miles.
CRC-Evans qualifies welding procedures for field work. The Automatic Welding Division performs a series of
procedural welds to determine welding speed, the type of consumable that works best, shielding gas, voltage and
amperage. Once the quality welding procedure is determined, it is locked in for use in the field. The procedure is repeatable, welders are trained for that procedure and then they go out and do it.
“Once you dial in the procedure, the only slowdowns are things like weather and crew change out,” DeWeese says.
The future looks arc-bright for CRC-Evans. The Automatic Welding Division recently patented an adaptive welding system that uses lasers to gauge welds and makes real-time adjustments to rduce the need for additional passes.
The new Vision System also captures data for records keeping. The system has already tested well in Europe and is just beginning testing in North America.
The Automatic Welding Division is working on many projects this year, including the El Paso Corp. Ruby Pipeline, the Florida Gas Transmission Phase 8 Expansion Project, TransCanada’s Keystone Pipeline and Energy Transfer Partners’ Tiger Pipeline, to name a few.
In addition to ongoing projects, DeWeese says more stringent regulations that might result from the BP oil spill could benefit CRC-Evans Automatic Welding Division in the near future.
“Regulations will likely push for higher welding standards, which are more difficult to meet with manual techniques,” he says. “In turn, more stringent regulations could be a big advantage for mechanized welding.”
The spill hasn’t stopped work from continuing in the Gulf of Mexico, nor does DeWeese see the spill slowing down the oil and gas industry as a whole, but it will delay projects related to deepwater drilling.
“Looking at the industry, the landscape is good,” DeWeese says. “We’ll be laying more pipelines in the next 10 years, not less. It bodes well.”
Down the Pipeline
Equipment rental and sales through the Pipeline Equipment and Automatic Welding divisions continue to make up the core of CRC-Evans’ business. The company’s services business and divisions have been growing strongly over the last five years.
Laing began work in the pipeline industry in 1979 for Nova, a pipeline owner in Alberta, Canada, where he qualified welding procedures. He joined CRC-Evans in 1982, starting in the Edmonton office and later moving to Houston during a market downturn to work as a staff welding engineer.
“It was supposed to be temporary,” Laing says. “Twenty-eight years later and I’m still here.”
The Pipeline and Automatic Welding Group accounts for a significant portion of CRC-Evans’ overall revenues, which range between $250 million to $300 million per year. Laing expects growth in the pipeline industry in the next few years, but he’s hesitant to forecast market conditions.
“2007 and 2008 were very busy,” Laing says. “In 2009, we experienced a very steep decline with the crash in oil prices. We’ve started to see recovery. If the price of oil stays around $70 per barrel, we think 2011 and 2012 will be growth years. In 2010, we have seen improvement over 2009. Our opinion is that 2011-2012 will be as good as or better than this year. Forecasting is very difficult in the oil and gas business.”
CRC-Evans has seen the most growth in its Automatic Welding Division, which was 100 percent international until the last 10 years, when the division started to establish itself in the North American market.
Internationally, CRC-Evans has strong pipeline-related business where transportation lines are being built.
Areas that are developing the most pipelines are Russia and China, Laing says. Russia is building pipelines to export
assets, while China is building pipelines for distribution within the country. India and the Middle East are also strong areas for the company.
“The most active regions are where the oil is,” Laing says, “such as the Middle East, West Africa, Brazil and the Gulf of Mexico, until recently. The BP oil spill has had only a minor effect on CRC’s business. Production in the Gulf is still going on. New construction will be proportional to the moratorium.”
In addition to oil pipelines, Laing says natural gas production from shale gas reserves will provide increasing opportunities for pipeline builders.
“Shale gas has changed the pipeline business fairly significantly and has transitioned from different areas with new sources cropping up,” Laing says. “As theses areas develop shale gas, they will need to build more pipelines.”
Laing dispelled any thought of the BP oil spill causing the increased interest in shale gas pipelines.
The oil spill in the Gulf of Mexico will affect the pipeline industry in terms of regulations and construction timelines, Laing says. The spill will bring more stringent regulations for companies to deal with, and many projects will be deferred. Instead of starting a project in November, it could start the following March.
Regardless of the trends in the industry, Laing says CRC-Evans remains dedicated to the oil and gas pipeline market.
“It’s a pretty exciting business,” Laing says, listing off what he likes about the oil and gas pipeline industry. “We use state-of-the-art materials. Productivity is important. We work globally. It’s technically challenging and always changing with new technologies and techniques.”
As oil and gas pipelines continue to be built throughout North America and across the world, CRC-Evans is prepared to meet those challenges and supply the ever-growing demands of energy consumers.
Bradley Kramer is associate editor of North American Oil & Gas Pipelines. Contact him at bkramer@benjaminmedia.com.